Pharmacy Companies Spend More On Advertising Than Research

Large pharmaceutical companies are spending more than twice the amount of money on promotion and advertising than they do on research and development, contrary to the industryâ€™s claim.

According to a study conducted by two researchers at York University, the U.S. pharmaceutical industry is estimated to spend almost twice as much on advertising as it does on research and development.

Contrary to the industry’s claim and regardless of its purpose of helping people, medication is big business and the best way to make money? Promote more and research less.

Researchers’ studied systematic data collected directly from the industry and doctors during 2004. Their calculations showed that of all US domestic sales amounting to US$235.4 billion, the pharmaceutical industry spent approx 24.4% on promotion, versus a mere 13.4% for research and development.

The research was co-authored by PhD candidate Marc-Andre Gagnon, who led the study and Joel Lexchin, a long-time researcher of pharmaceutical promotion, Toronto physician, and Associate Chair of York’s School of Health Policy & Management in the Faculty of Health.

“In our paper, we make the case for the need for a new estimate of promotional expenditures by the U.S. pharmaceutical industry,” says Gagnon. “We then explain how we used proprietary databases to construct a revised estimate and finally, we compare our results with those from other data sources to argue in favor of changing the priorities of the industry.”

“This study is very important as it shows the most accurate image yet of the promotional workings of the pharmaceutical industry,” says Lexchin.

Despite the shocking findings, both researchers agree that these figures are an underestimate. This is because certain advertising campaigns such as off-label promotion and ghost-writing could not be taken into consideration.

With these factors included, it is likely that pharmaceutical companies are spending more than twice as much on advertising compared to research and development.

The authors of this study also note that the number of meetings for promotional purposes has dramatically increased; rising from 120,000 in 1998 to 371,000 in 2004. This further supports their findings that the U.S. pharmaceutical industry is marketing-driven.